I think BABA is up on the potential Buffet entrance into YHOO's bidding process.
I know this take sounds unusual but that's what I see, Illogical as it comes across. But then again the markets are illogical, so I might be onto something.
If Buffet is indeed an interested party then I expect shares in YHOO to head over $40 soon. Would not be surprised to see Monday as one of the strongest trading days in YHOO in a long time. $40 by the end of next week could be an easy achievement.
So much skepticism in the sale of YHOO, due to numerous failed attempts to fix Yahoo, then the failure to spin off BABA. Investors just don't think anything positive can come out of anything that YHOO does.
With Buffet's reputation, this adds a tremendous amount of legitimacy to the sales process. With YHOO's new board members, with the likes of Smith and Hill, this makes for a strong case from a buyer and seller perspective. AKA you have strong players on both sides.
Best to all longs. This could easily shakeout shorts.
Today's share price drop in BABA makes no sense to me. What about the deal with Softbank is not good for BABA, and joined at the hip Yahoo?? As a side note YHOO should not move in lock step with BABA's share price unless one believes that the enterprise value of YHOO is only in their BABA holdings.
If one parses the deal with Softbank it makes perfect sense. At least to me. Softbank is an 800lb Gorilla in Japan, like Yahoo Japan is. Softbank is giving Alibaba it's blessing to pursue their customer base for Cloud services. Alibaba has a strong and growing Cloud business and Japan is more of an open market for them. Especially with this deal.
The Japanese highly value long term relationships. So Alibaba is feeding into Softbank's relationships. Which means that Alibaba has a far far greater opportunity here, to build their business in Japan then going it alone.
Don't get it. But hey the markets are often irrational.
Investors sold as there was no update on ACAS's strategic initiatives on their Q1 earnings report. Just what Malon had told us a few months ago. There would be no update.
Impossible for retail investors to show any patience. Why don't they realize that the higher BV the better chance of receiving a higher valuation for shares. We will know in a few months at the latest. According to Malon. That is not an eternity my friends.
I bought more. Expecting $16.50 to $17.00 a share
So the fact that Arlington is selling for less then 60% of BV does not concern anyone here?
Discount to BV's have narrowed materially within the sector AI invests in. This due to activist shareholders, and companies purchasing assets for less then a Dollar. Why is AI not seeking a strategic initiative to unlock value that is owned mostly by retail investors? Based on similar transactions to date AI's worth should be around 85% of BV, at minimum. Perhaps more in a sale or liquidation. That is at least 25% upside based today's closing price.
I do not see dividends as sustainable, and that's why AI's current share price is priced accordingly. How is value going to be created for shareholders? Even though Imation/Clinton has less then 1% of AI, what percentage does each one of you own?
I have no skin in the game but after 4 decades investing in the market i can tell you from experience that AI's mgmt is looking out for themselves. Jobs and bonuses trump creating value for you. Again they're attacking an entity who owns less then 1% of shares, which is probably way way more then any retail investor. Aren't your wishes important?
This is meant as food for thought. Best to all shareholders.
Yahoo tried to spin off BABA, only to run into a tax roadblock. So they couldn't make that work. Tried to turnaround Yahoo core numerous times. That didn't work.
Basically investors have little faith that anything will work out in their favor. Can you blame them??
YHOO's price run up is irrelevant to what the SOTP's are worth. What is rarely discussed in YHOO's valuation is cash, net debt, real estate and patents. The valuation's key is if a tax event can be avoided or minimized. The more favorable that plays out the most likely we are to see an easy $45 plus. $50 would not be out of the question.
Per shares. $6 billion for Yahoo core. $3 cash, $1 real estate, $2 for patents, $30 billion for BABA and $9 billion for Yahoo Japan. I don't think my numbers are a stretch at all. That gets us to around $50. Still $45 more likely.